Trump approves Keystone XL, calling it 'great day' for jobs

Rex Rios

Canadian Prime Minister Justin Trudeau, who has backed the Keystone project, said in French that his government was "very pleased" with the USA announcement, according to an interpreter.

Michael Brune, head of the Sierra Club, the largest United States environmental organisation, called the pipeline approval "yet another decision made by Trump that would be disastrous for our climate, our communities, and our health".

Parts of the pipeline have already been built, and construction on the project will continue in several months, Russ Girling, president and CEO of TransCanada, said at the White House on Friday. And he had given officials until next Monday to complete a review of the project.

The State Department also estimates that about 16,100 additional jobs will be created during the construction via firms awarded contracts for materials and services. The US imports almost half of the almost 8 million barrels a day of crude from Canada.

"We believe that the receipt of the presidential permit was expected by the market", RBC Capital Markets said in a note to clients. That reverses former President Barack Obama's 2015 decision to reject the controversial pipeline.

President Trump yesterday made good on his campaign promise with the state department approving the 800,000 barrel a day capacity northern leg of the Keystone pipeline. State-level approvals are needed in Nebraska and from other federal agencies including the Army Corps of Engineers, along with necessary permits and approvals by various entities in the states where the pipeline may be constructed. "The environmental aspect of the deal, which would increase heavy Carbon dioxide emitting Canadian tar sand production, may still cause a long delay before the pipeline is eventually being built". That challenge has been discontinued, TransCanada said Friday.

The company has spent at least $2.5 billion on the project, whose total cost once built would be more than $10 billion due to delays and permitting costs.

The consent for the pipeline should come from the Secretary of State, Rex Tillerson, but Tillerson said he had been far from the discussions because of his previous functions as head of the oil company ExxonMobil, with investments in the bituminous sands from where the oil would come. One protest is set for Friday evening at the White House.

In the long run the pipeline will have a positive ripple effect for oil production. Environmentalists oppose oil sands because producing it requires additional processing that emits more pollution.

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